Cash Inflows & Outflows

• Cash inflow - money made by the business from its sales or investments
• Cash outflow - money paid out by the business to fund its sales or investments
• Cash Flow Forecast - a prediction of the money coming in going out of a business over a 6-12 month period
• Closing balance - the amount that remains in the account at the end of an accounting period
• Opening Balance - the amount brought forward from the end of the preceding accounting period so that its the starting figure for the new one
• Businesses with seasonal products might experience cash flow problems because there is less demand when it is out of season (e.g. puffer coats in summer)
• Examples of seasonal products are:

  • Christmas trees
  • Ice cream
  • Puffer coats
• A cash surplus could be a problem for a business because it could get taxed more